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Ohio AG Asked to Pursue Rover Penalties as State EPA Says Negotiations ‘Not Productive’

The Ohio Environmental Protection Agency (Ohio EPA) has asked the state attorney general (AG) to pursue civil penalties for alleged environmental violations that may have occurred during construction of Energy Transfer Partners LP's (ETP) Rover Pipeline.

The move comes after ETP allegedly refused to recognize Ohio EPA's enforcement authority when it cited the 3.25 Bcf/d, 710-mile Rover project for numerous environmental violations earlier this year.

Ohio EPA Director Craig Butler wrote to Ohio AG Michael DeWine on Friday asking that his office "initiate civil proceedings to pursue civil penalties against Rover Pipeline LLC and any other appropriate parties" for the alleged violations. Butler also issued an updated series of proposed orders Friday detailing response and remediation for the violations.

“If I determine that Rover Pipeline LLC has failed to comply” with the orders issued Friday, “I would further request that you initiate civil proceedings to compel compliance with these orders and any other environmental law that has been violated," Butler wrote.

In May, Ohio EPA issued proposed administrative orders -- including $431,000 in civil penalties -- for a number of alleged environmental violations occurring during Rover's construction.

The list of violations notably included an April drilling fluids spill at a horizontal directional drilling (HDD) site near the Tuscarawas River in Stark County, OH. Ohio EPA said Friday it "later determined" the spill "to be several million gallons of bentonite slurry" released into what it described as a Category 3 wetland.

While the proposed orders might have led to a settlement agreement, Butler said ETP/Rover was refusing to recognize Ohio EPA's enforcement authority and called on FERC to intervene. Soon after, the Federal Energy Regulatory Commission ordered ETP/Rover to halt HDD activities at several locations on its route pending an independent review, impacting construction progress toward a full Phase 1 start-up that was originally scheduled for this month.

Ohio EPA spokesman James Lee told NGI’s Shale Daily on Monday that ETP/Rover was maintaining its position that Ohio EPA does not have enforcement authority.

"Following the initial proposed orders issued in May, two more updated versions of the proposed orders were shared with Rover that updated additional violations of Ohio's environmental laws and additional orders to address concerns," Lee said. "Because Rover chose not to enter into negotiated orders with Ohio EPA to resolve these incidents," Butler "issued these unilateral orders. The civil penalty portion of the enforcement case has been referred" to the Ohio AG's office.

Ohio EPA decides whether to request assistance from the Ohio AG "in cases like this, when negotiations are not productive,” Lee said.

"At the direction of Ohio EPA and FERC, Rover has taken some steps to better prepare for future inadvertent returns but has refused to formally agree to implement most of the requirements contained in the proposed orders," he said.

ETP/Rover spokeswoman Alexis Daniel told NGI’sShale Daily on Monday that the company couldn't comment "on issues related to current or pending legal matters. However, I can tell you that we have been and will continue to discuss these matters with Ohio EPA in hopes of resolving all outstanding issues."

The Tuscarawas River HDD spill, the focal point of FERC's May 10 HDD moratorium, would appear costly for a Rover project on a tight schedule to hit the market by winter 2017/2018. FERC's order has halted progress for two months on remaining HDD locations -- including a creek crossing for an important Phase 1 lateral in eastern Ohio. According to analysts, every day that passes with the HDD moratorium in place increases the risk that Phase 2 -- still scheduled for November -- gets pushed back.

FERC said June 1 it had launched an enforcement investigation based on Ohio EPA tests showing evidence of diesel fuel in the drilling mud released at the Tuscarawas River site, which would be a possible violation of Rover's certificate order.

Ohio EPA said the tests were conducted after it "received two complaints of diesel fuel being added to the drilling mud at this Site. Ohio EPA conducted two separate sampling initiatives" May 12 and May 19. "The May 12 results indicated the presence of 'diesel range organics' (DRO) in all five samples. Based on the DRO data, supplemental sampling was initiated on May 19 to determine the presence of petroleum hydrocarbons. Petroleum hydrocarbons were found in six of seven samples, with only the sample of new mud showing no traces of hydrocarbons.

"Ohio EPA continues to investigate the allegations within the two complaints."

In its proposed orders, Ohio EPA listed eight other inadvertent returns from HDD activities during Rover's construction, in addition to the Tuscarawas River incident. The agency also accused ETP/Rover of stormwater violations, unauthorized discharge and water quality violations, an industrial waste disposal violation and an open burning violation. Ohio EPA further accused ETP/Rover of violating the project's Clean Water Act Section 401 certification because the project began construction before paying "all applicable fees" for its certificate.

Rover is scheduled to come online in two phases this year. The highly anticipated producer-backed project is designed to connect Marcellus and Utica shale gas to markets in the Midwest, Gulf Coast and Canada. The initial part of Phase 1 from Cadiz, OH, to the Midwest Hub in Defiance, OH is on track to begin service this month, ETP said recently. ETP has remained committed to placing the entire project into service by November.

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